CCCH9012 Pre: China's Economic Impact in Africa

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Transcript of CCCH9012 Pre: China's Economic Impact in Africa

Part 1: Background Part 2: China’s economic impact in Africa: some facts Part 3. Understanding China’s economic presence in Africa References Investment, trade, aid, loans, Debt relief Thank You! The End. By Peter Zhang and Flora He China's economic impact in Africa Structure 1. Background2. China’s economic impact in Africa: some facts3. Understanding China’s economic presence in Africa a. Why is Africa so important to China? - Resources: Oil raw materialslabours - Market - Allies To advance diplomatic influenceTo isolate Taiwan China’s economic reform and rise World trend: emergence of developing countries b. Why is China the dominant player in Africa instead of the West? China-Africa relationship 1. China is the workshop of the world 3. Heavy industries have become more significant in China. Post-Mao Period Affirmed the Third World’s important role

Focus had been on the two superpowers and the developed countries Period after Tiananmen protests Felt the pressure from the west.

Resume and develop relations with old friends in Africa. Recent 10 years The first forum on China-Africa Co-operation (FOCAC) was held in Beijing in 2000 In 2005, President Hu Jintao announced a package of aid measures in support of developing governments in a fund-raising conference of the UN. In January 2006, for the first time, the Chinese government issued a White Paper on China’s Africa Policy. Since 1979, China has carried out massive economic reforms China demands more raw materials and energy resources from abroad. - West: Marginal concern over Africa; colonial historyStringed aidsMainly focuses on oil and other commodities c. Is China's economic presence in Africa positive or negative? -China: Historical friendshipNon-stringed investment; non-interference policyComprehensive aids including infrastructureSoft power boosting Africa is perceived as rich in natural resources, especially in oil, nonferrous metals and fisheries China's export structure meets demand in Africa where price is of more concern than quality. 2. China as a growing market for commodity Merits:Major source of developmental financeComprehensive aid including infrastructural projectsBoosting up the strategic importance of Africa in the world economyChinese model as an alternative approach of development c. Is China's economic presence in Africa positive or negative? Demerits:Bad corporate governance and economic orderThe danger for Africa to become a supplier of primary commodities and fail to further industrialize Indirectly support African dictatorships, and exacerbating existing conflicts and human rights abuses in troubled countries China has experienced an unprecedented phaseof industrialisation and economic development. African exports to China started accelerating around 2000, and have since risen at an annual growth rate of more than 50 per cent.

Taking exports and imports together, China is Africa’s largest trading partner Aid Official nonconcessional loans Debt relief Increasing trade surpluses and foreign exchange reserves investment overseas ensure supply of energy and raw materials Chinese enterprises have been active in infrastructural projects in Africa. Aid: external assistance as defined in the government budget plus concessional loansdisbursed by China Eximbank The nonconcessional lending of China Eximbank is rising rapidly and is larger than that of other major export credit agencies. China takes an active part in debt relief operations for Africa within the international multilateral framework. Concessional loans: lower interest rates, longer repayment periods. Debt relief means that China cancels the mature governmental debts of some developing countries. What is Africa? Alden, C., Institute, International African, & Society, Royal African. (2007). China in Africa: Partner, Competitor Or Hegemon? : Zed Books.Besada, H., Yang, W. & Whalley, J. (2008). China’s Growing Economic Activity in Africa. NBER Working Paper No. 14024. May 2008. Retrieved from http://www.nber.org/papers/w14024 on 16, Mar. 2013.Brookes, P. & Ji, H. S. (2006). China’s influence in Africa: implications for the United States.No. 1916. The Heritage Foundation.Retrieved from http://relooney.fatcow.com/SI_Oil-Politics/Africa-China_62.pdf on 16, Mar.2013.Cheng, Y. S. J. & Shi, H. G. (2009). China's African Policy in the Post-Cold War Era, Journal of Contemporary Asia, 39:1, 87-115.Christensen. B. V. (2010): China in Africa - A Macroeconomic Perspective, www.cgdev.org, working paper 230 .Eisenman, J. & Kurlantzick, J. (2006). China's Africa Strategy. Current History; May 2006,p. 219. Retrieved from http://www.relooney.info/SI_Oil- Politics/China-Energy-Oil-Africa_26.pdf on 16, Mar. 2013.Jacques, M. (2012). When China Rules the World: The End of the Western World and the Birth of a New Global Order: Second Edition: Penguin Group US. c. Is China's economic presence in Africa positive or negative? c. Is China's economic presence in Africa positive or negative? -Conclusion Short term: positive Long term: ? It depends on whether China is willing to:Change the corporate governance styleGo beyond natural resources exploitationRaise concern over democracy and human rights c. Is China's economic presence in Africa positive or negative? What do you think? An inequality between China and Africa Danger for Africa to be locked into supplier of primary commodities. Chinese model:Characterized by the idea of strong government and eschewing of the notion of democracy.Appealing to most authoritarian regimes in Africa